Wednesday, October 14, 2009

News You (Probably) Didn't See Yesterday

I’d like to second Bonddad and welcome Silver Oz aboard. I’ll also second the notion that there’s some pretty good work being pumped out of the Bonddad Blog.

A couple of second-tier economic releases printed yesterday, and they were both disappointments. First up, the National Federation of Independent Business (NFIB), released its monthly Small Business Economic Trends (SBET) report (usually released on the second Monday of the month). The overall level of small business optimism rose from 88.6 to 88.8 – more noise than signal, if you ask me. Insignificant.

Beneath the surface, however, a couple of items caught my eye:
“Poor Sales” remains far and away the single biggest concern of small business owners (click for larger image).

The ongoing concern over sales likely plays no small part in the second troubling aspect of yesterday’s release: The hook back down in hiring intentions.

Hiring Intentions hooked back down to -4 from 0. This measure has not been above zero since October 2008 -- one year running now, and clearly the worst stretch in the history of the series.

Separately, the IBD/TIPP confidence numbers were released yesterday, and they, too, hooked back down:

NEW YORK, Oct 13 (Reuters) - U.S. consumer confidence fell in October, and after months of fluctuations in sentiment, further negative pressure caused by mounting unemployment could hurt consumer spending, a research group said on Tuesday.

Investor's Business Daily and TechnoMetrica Market Intelligence said their IBD/TIPP Economic Optimism Index slipped to 48.7 in October from 52.5 in September.

Readings above 50 indicate optimism, while those below 50 point to pessimism.

The index is now 0.6 points above its 12-month average of 48.1 and 4.3 points above its reading of 44.4 in December 2007, when the recession began.

As I noted in a previous post, it appears to me that the green shoots have begun to turn a bit brownish, and that the onus is now on the economic bulls to continue making their case. Pulling back the lens a bit, I sense this is all part of the loss of U.S. hegemony, something I hope to explore in more detail in future posts, as I think the consequences will be long-lasting and far-reaching.